AWM CEOs are cautious but a focus on productivity could improve their outlook, part of PwC’s 22nd CEO Survey trends series.
For traditional asset and wealth management (AWM) firms, the biggest disruptor in recent years has been the growth of passive investments and their associated lower fees. Declining fees, along with shrinking shelf space as distributors streamline the range of the funds they offer, are among the main reasons productivity has become such a key issue. Indeed, the growing popularity of passive funds — which are often tied to indices and lower-fee products such as smart beta funds, which use technical filters rather than market cap to rank asset selection — could cut fees by almost 20% on an asset-weighted basis across the mutual fund industry by 2025. This is a somewhat troubling forecast as assets under management are expected to continue to increase during this time.
Source: PwC's 22nd Annual Global CEO Survey, 2019
“We’ve done some research, both on profitability but also on consolidation. We think there is going to be a lot of consolidation in this industry so that by 2025 there will be 20% less managers in that time than there are today.”
Global Asset & Wealth Management Leader, Partner, PwC Ireland (Republic of)
Tel: +353 (0) 1 7928719
John W. Stadtler
Financial Services Industry Partner, PwC United States
Tel: +1 (617) 530 7600